Second Thoughts: Myths and Morals of U.S. Economic History

A Collection of Historical Bumper Stickers by 28 Researchers

The two magnetic poles of social science are the bumper-sticker and quod erat demonstrandum—that is, the important and the precise. Anyone can make his statements precise and cohesive if he is willing to be irrelevant, and anyone can prattle about important issues if he is willing to be imprecise and incoherent. The best social science balances the pull of both poles: it struggles to span both precision in statement and importance in message.

Second Thoughts offers historical bumper-stickers by 28 researchers who have been through the Q.E.D.s of their field. In their research they have started with one set of bumper-stickers, explored the bases for them, and studied, studied, studied. They have trudged and maneuvered through beds of quicksand to make their facts precise and their logics cohesive. But they do not get lost in the delightful Q.E.D.s of the academic enterprise. They emerge from the experience soiled, exhausted, and uncertain, but holding in their outstretched hands new bumper-stickers, summary statements they have given rich subsidiary content to, statements that address our curiosity about how mankind’s lot can be bettered. Second Thoughts represents a special effort to share with us the learning of these scholars, an effort too often left undone because the academic rewards for bumper-stickers are so thin.

For example, Price Fishback writes a five-page essay entitled, “Does Workers’ Compensation Make for a Safer Workplace?” Fishback has written a book and numerous scholarly articles on the conditions of coal miners in America’s past. From his intimacy with the facts and logics of the subject come lessons for similar issues today.

Prior to workers’ compensation laws, liability for workplace accidents was based on common-law standards of negligence. Fishback summarizes the legal notion of “due care” on the part of the employer, and explains that the employer often escaped liability because the injured worker had accepted the risks involved, had himself been negligent, or was harmed by a fellow worker’s negligence. These doctrines “encouraged common-sense prevention of accidents by the parties with the lowest cost of prevention”—often the workers on the scene. And jobs with high risks commanded high wages.

But between 1910 and 1930 most states passed workers’ compensation laws that tended to hold employers liable for all serious accidents “arising out of employment.” Fishback explains that, besides driving down wages and job opportunities, these laws sometimes even increased workplace hazard! In coal mining, accidents actually increased. “Since coal loaders and pick miners were paid by the ton of coal, they saw that by working a little faster and taking more risks they could get higher earnings—even though a roof fall injured or sometimes killed miners who tried to finish loading cars before setting new props for the roof.”

From his detailed learning, Fishback serves up a sort of historical bumper-sticker—workers’ compensation had high costs and sometimes did not achieve even its primary goal of inducing workplace safety—and shows how this pertains to current liability issues.

Here are some of the other bumper-stickers offered in the book:

•       Aside from Africa the Third World is not stalled in dependency and squalor but improving rapidly.

•       Imperial powers serve their vanity not their fortunes by maintaining colonies.

•       Immigrants enrich a nation.

•       The American economy is not falling behind any more than a father falls behind as his children gain poundage in the family.

•       Economic enterprise advances technology as much as technology advances economic enterprise.

•       The trade deficit itself is no ailment but perhaps a symptom of real ailments.

•       Monopoly persists by grace of government privilege not market power.

•       Free banking in America worked reasonably well.

•       People consume a lot of resources in jockeying for position to receive government giveaways.

Not news, perhaps, but here we can see how such claims are rooted in stories involving the I.C.C., steamboats, wildcat banks, Teapot Dome, squatters, Ma Bell, Munn v. Illinois (1876), Plessy v. Ferguson (1896), UNIVAC I, the Securities Exchange Act (1934), the Cavendish Lab, hand looms, Luddites, Regulation Q, and Alan Greenspan. The essays give parsimonious accounts of particulars that stand behind the bumper-stickers. Because the editor has chosen experts—including Julian Simon, Robert Higgs, Jonathan Hughes, Peter Temin, Gary Libecap, and Nathan Rosenberg—we have confidence that the bumper-stickers emerge from deep learning. A brief bibliography invites the reader to deeper digging.

The libertarian might have a few bones to pick. Jeffrey Williamson seems to suggest that infrastructure development requires activist government, Barry Eichengreen gives a mixed review to the gold standard and says it would be impossible to re-establish today, Hugh Rockoff says that in special circumstances for short durations price controls can work, and Paul Uselding tells of the “facilitative and supportive” role that the U.S. government has played and should play in technological development. But mostly the book offers stories in line with small-government thinking.

My favorite passage comes in Elizabeth Hoffman’s piece on how worker displacement and retraining belong to progress: “The challenge for the future will be to train each generation for a lifetime of change rather than for a specific skill or job. This task suggests that the kind of education that will best prepare the next generation is an education in flexibility: learning to learn new things.”

Donald McCloskey has done an admirable job in bringing the layman to the academic toiler and bringing the academic toiler to humanity. []

Dr. Klein is an Assistant Professor of Economics at the University of California, Irvine.